Officer Compensation for Calendar Year 2012
BACKGROUND:
The Postal Accountability and Enhancement Act of 2006 (Postal Act of 2006) amended 39 U.S.C. and revised the cap on total compensation payable to U.S. Postal Service employees. Postal Service employees generally could not be paid more than $199,700 for calendar year (CY) 2012. Exceptions under the law allowed some employees’ annual compensation to total up to $230,700 with a Board of Governors (Board) approved bonus or reward program, or $276,840 for critical positions. Compensation includes annual salary, merit lump sum payments, bonuses, awards, and annuity payments. Our objective was to determine whether the Postal Service complied with the Postal Act of 2006, Postal Service policies and guidelines, and IRS regulations for CY 2012 officer compensation.
WHAT THE OIG FOUND:
Although the Postal Service complied with IRS regulations for CY 2012, it did not always comply with annual officer compensation caps as required by the Postal Act of 2006 or its own internal policies and guidelines for leave approval. This occurred because management previously misinterpreted the Postal Act of 2006. We identified three officers whose compensation exceeded the caps.
The Postal Service asserted that two officers who received base salaries above the pay cap of $199,700 were approved as critical employees by the Board, but their names were not submitted to the Office of Personnel Management and Congress.
One officer's annuity was not included in the compensation cap computation. With annuity, this officer’s total compensation exceeded the second cap of $230,700 and the officer was not on the list of critical positions.
As a result, during CY 2012 the Postal Service paid $142,075 above the compensation caps. According to the Postal Service's 2012 annual report, officers’ salaries were to remain frozen; however, we identified seven officers who received salary increases while maintaining vice president positions. Also, one officer's leave request was modified and processed without proper approval.
WHAT THE OIG RECOMMENDED:
Management agreed to follow new criteria that addressed the issues discussed in our report. Since these criteria were developed in CY 2013, subsequent to the compensation period reviewed, we are not making any recommendations.